cba2 - How sensitive are the results to the discount rate...

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A city is considering installing a treatment plant to remove cryptosporidium from its source water. Cryptosporidium causes illnesses, the cost of which has been estimated to be $1,400 per year. In some cases, it can cause death. The value of a death avoided (the so-called value of a statistical life) is assumed to be $6 million. The city is considering several plant options, each with its own capital costs and operation and maintenance costs. They are listed on the data sheet. The effectiveness of each plant is somewhat different. Each reduces the probability of illness and death. These reductions are also shown in the data sheet. The numbers represent the expected number of illnesses and deaths avoided if the treatment is used. Which treatment technologies are viable? Which should the city use?
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Unformatted text preview: How sensitive are the results to the discount rate? Capital costs Bag Filters 77,048 3,155 0.0100 155,451 10,615 0.0500 51,974 4,478 0.0500 GAC (EBCT = 20, 240 day regeneration) 1,191,000 94,500 0.1000 1,104,562 65,882 0.1000 708,580 12,065 0.0010 1,776,377 69,500 0.1000 Cost of illness 1,400 Value of statistical life 6,000,000 Discount rate 0.03 Annual O & M Costs Annual reduction in illnesses Cartridge Filters (filter loading 30 pgm/filter) Convert to Chloramines (NH4 dose = 0.55mg/l) Ozone (2.0 log dose, 12 minute contact time) UV with UPS (dose = 200 mJ/cm2, UV254 = 0.05, turbidity = 0.1 NTU, Alk = 60 mg/l, Hardness = 100 mg/l) Microfiltration/Ultrafiltration (T = 10C, sewer discharge) 0.0010 0.0035 0.0015 0.0300 0.0250 0.0150 0.0250 Annual reduction in deaths...
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cba2 - How sensitive are the results to the discount rate...

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